I Have Good Company With My View That Rickards Is Full Of B.S.

All this says to me that people who are perceived as being credible keep circulating these absolutely preposterous myths. But if people want to believe the fairly tale that the United States still has all its gold safely vaulted in places like New York and Fort Knox, they are telling you that this is how all this synthetic gold has in fact been created.

That quote and the one below is from Hong Kong-based fund manager, William Kaye on King World News (LINK).

The U.S. government is essentially communicating to people through its agents that we still have all that gold in our vaults and to prove it, here is the serial number. So, if necessary, just show up with this piece of paper and we will deliver the gold.

I have said all along that Rickards is a front for the Government and is trying to sell the idea of using the IMF SDR to the world as a reserve currency replacement for the dollar. In other words, the elitist insiders high up in Government know that the dollar’s days are numbered. But the dollar is by far the highest percentage component of the SDR (42%). This remedy would extend the ability of the U.S. to kick the can of its economic demise down the road. Too bad for the U.S. that the IMF SDR will not be the dollar replacement.

My Easy Trade idea is still valid. It’s bounced nicely from its low on Friday and we’ve made a nice gain in the fund from taking delivery of the stock from the puts I shorted Friday morning. For anyone who buys the report, I will still offer free options trading advice/strategies if you email me after you’ve read the report: Easy Trade Idea.

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14 thoughts on “I Have Good Company With My View That Rickards Is Full Of B.S.”

The SDR need not replace the dollar to be the currency in which commodities are priced. And I would expect the dollar weighting within the SDR basket to shift downward. This is what the IMF Code of Reforms are all about. My guess is they will be signed by the US. Restructuring up the pyramid is the only option here (other than a Dark Ages collapse.) I think Rickards is a pawn to get people used to the idea of SDRs.

The SDR is irrelevant. China and the SCO consortium, which will be admitting India, Pakistan, Iran and Mongolia in September. The SCO could care less about the SDR because the members ultimately are all working on bilateral trade in their respective currencies AND they’ve already established their own version of the IMF. PLUS, every single SCO country has been hoovering gold as part of its country reserves.

The ‘Gold Shortage’ Myth and the
Creation of the Special Drawing Rights (SDRs)
Whenever monetary experts did not know what caused the
recurring monetary crises, they usually blamed it on gold by creating
the myth about the shortage of physical gold. This, as we know from
the history of the gold standard, was a clear misinterpretation of the
situation and far from the truth. The real problem always was that
too much fiat money was being created, and so it should be with the
invention of the SDRs. This so-called ‘Paper Gold‘, created by the
Treasury under its Secretary Fowler and Undersecretary Paul A.
Volcker, was designed to complement gold. This was done because
it was believed that there was not enough gold and foreign
exchange, i.e., dollars, in the market. However, in reality, the world
had plenty. In 1969 the SDRs were integrated into the international
monetary system.
Jacques Rueff commented:
“Meanwhile monetary experts devised an
ingenious scheme for concealing the United States‘
insolvency by allocating every country a quota of
special international reserves to be held only by
central banks. But to avoid added inflationary effects,
the amount of SDRs had to be limited. Thus, even
with the help of SDRs, the United States could not
have redeemed more than a fraction of its dollar
debt.”24
The Wall Street Journal greeted this achievement in modern
financial alchemy enthusiastically. Hoppe summed it up:
“‘U.S. SCORES PAPER GOLD TRIUMPH’
and Undersecretary of the Treasury Paul A. Volcker
told newsmen with a broad smile: ‘Well, we got this
thing launched.’ The Journal welcomed it as a ‘major
success for the American school of economic thought,
since it dealt a blow to old-style backers of gold as the
sole yardstick for monetary value and economic cureall.
’ The Journal’s comment overlooked the fact that
the SDRs had to be denominated or defined in a
certain amount of gold. So gold was still the
undisputed ‘yardstick’ of monetary value.
Furthermore, it was specifically noted that the SDR
could never be ‘devalued.’”25
D. Hoppe was convinced that the SDR plan was one of the
greatest financial swindles ever perpetrated, and that:
“[…] it would, one day, be ranked by historians
along with such other gems of human opacity as John
Law’s Mississippi Scheme, the assignat madness and
the South Sea Bubble. Somehow defining the SDR
unit as being ‘equal’ to gold and then just as solemnly
declaring that it is not redeemable in gold, strikes one
as a patent absurdity. A paper currency or unit of
credit can be regarded as ‘equal’ to gold only if it is in
fact convertible into gold at a fixed price or rate,
without restriction.”26
Richard M. Salsman thought that the SDRs were the farthest
thing from gold one can imagine.27

The late economist Dr. Melchior Palyi had some harsh words
for the idea of paper gold:
“The new SDR reserve currency will serve only
to encourage a more reckless financial expansion and
inflation on a world-wide basis. The adoption of the
SDRs will be the triumph of the inflationists. It will
remove the last obstacle on the road to a fully
managed ‘world currency,’ one that presumably will
never be allowed to become short in supply. It is
literally the old ‘greenback’ policy on a global
basis.”28“
When I asked former central banker John Exter about his
opinion, he answered:
Under the gold standard, paper currency notes
promised to pay to the bearer on demand a fixed
amount of gold in exchange for the note. Today, our
paper money is nothing more than an ‘I-O-U
nothing.’ The IMF‘s attempts to substitute so-called
paper gold for the real thing is one of the most absurd
concepts I’ve ever heard in my life. I call the IMF‘s
Special Drawing Right a ‘who-owes-you-nothingwhen
’ — there is no obligor, no promise to pay, no
maturity date. It is the most preposterous credit
instrument ever conceived by the mind of man.”29

Philosophy of Metrics is also on my watch list, a web site that appeared earlier this year. There are good conversations there, but I detect a similar underlying agenda to Rickards. There are various points of view allowed, but it always comes back to the reasonableness of the new fiat regime by the blog owner, Chris. My recent comment in that blog was never posted, in which I pointed to this agent Rickards phenomenon and the likely failure of the SDRs as they too would devalue in time. Anybody trying to pave the way to the SDR solution is part of the establishment and part of the problem.

I don’t agree with some of what he says, but I think he presents the best outline I’ve read of what these institutions are planning. Of course that doesn’t mean it’s going to work. But I do think the world is already far more consolidated than we realize.

A theme of his is “consolidation or collapse.” I think it’s more like “consolidation and collapse.” That’s where the SCO/BRICS bank comes in. As the dollar “collapses” the East will have a system. But it is a bridge to the next system where commodity-backed sovereign currencies will be pegged to SDR, scheduled to coincide with the final implementation of Basel III in 2018, and to be seen as a response to the immense pain about to be inflicted on the West in this great Hegelian drama.

Dave,
I don’t agree with everything Rickards says and I agree with you that the physical gold is most likely all gone or almost all gone, but he has said many times on the record the SDR is awful, it’s an excuse for more inflation and he thinks it will fail rather quickly too if it does get implemented.

“I have said all along that Rickards is a front [or a pawn] for the Government and is trying to sell the idea of using the IMF SDR to the world as a reserve currency replacement for the dollar. In other words, the elitist insiders high up in Government know that the dollar’s days are numbered. ”

Having read both of Rickards books, each of which starts with a section on his interactions with the Pentagon/White House suits, I would tend to agree.

Great questions at IRD. Informative answers too!
If the new rumored “domestic dollar” AKA the Treasury Note, is launched this year, there’ll be a devaluation- revaluation in terms of old Federal Reserve notes of 10% or more in each of one, two or three steps/stages, depending on unfolding circumstances.
But the outer half, the external international dollar, will not lose purchasing power or exchange value on the Forex markets. For one thing, this contributes stability to massive holdings of dollar-denominated bank reserves and investments overseas .
Although censored, classified and cloaked in secrecy, Saudi Arabia, stinging from the theft of it’s European gold by the black nobility, has severed it’s commitment to the petrodollar.
When they soon announce their oil will be transacted in yuan or multiple currencies, the rest of OPEC will break from tradition and their protective Russia/China umbrella will no longer be hidden.
As to “China and the SCO consortium, which will be admitting India, Pakistan, Iran and Mongolia in September”, the progression of events so far substantiates an imminent monetary reset. Not only will the SDR and it’s connected arteries the IMF, the Fed, World Bank etc, be soon reexamined, but it’s entire foundation in socioeconomic misapprehensions, geopolitical presumptions and dysfunctional, insolvent, and morally bankrupt institutions and practices.

Also involving September, Andrew McGuire stated in an August interview he expects PM’s price discovery at numerous physically settled Eastern metals exchanges (Hong Kong, Shanghai, Singapore etc.) to prevail.
And in this new piece mentioning GATA and others seeking transparency and undistorted markets, bullion trader GoldCore’s consultant, Ronan Manley (like McGuire and others)also expects Eastern physically settled markets having real-time price discovery to dominate the derivative and computerized versions:http://www.miningweekly.com/article/cause-for-concern-as-rebranded-silver-fix-goes-live-2014-08-18
Excerpt:
““Regulators need to look at the process and institute a new pricing mechanism and ensure that the price of silver is based on real physical precious metals supply and demand between government mints, refiners, miners, manufacturers, jewellers and of course investors,” he reasoned.

Further, as gold and silver moved East in unprecedented volumes, western institutions were gradually losing their grip on the precious metals markets.

“The advent of new gold exchanges with physical gold settlement such as the new gold and silver exchanges in Dubai, Shanghai and Singapore would make price discovery more efficient and render price manipulation more difficult.

“The physical market and the natural forces of supply and demand will soon overcome the paper and digital gold markets,” Manley said…”

What’s wrong with using Precious Metals for everyday trade? Silver coins jingled in the pockets of the average American until 1964 (or 1970 when the last silver clad half was minted.) Nobody thought twice about using silver dimes, quarters, half dollars and silver dollars to buy daily necessities and small luxuries.
Gold was the king of money until 1933, and even back then gold was still used as money as backing for the dollar until 1971.
The problem is too many people think silver and gold are too precious to be used as money, we need to think of silver as $20, $50 or $100 bills, valuable but not too valuable to use for purchases. Gold should be thought of as a $1000 or $5000 bill, very valuable but not priceless and only used for Big purchases.

change your thinking, change your mind and you can adapt to the change around you.